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Reprint: R1406F Almost every retailer looks to Google to refer customers, and it’s rare to find a manufacturer whose products aren’t sold on Amazon. But these and other big platforms can capture a disproportionate share of the value a company creates: Buy an app on iTunes, and Apple takes 30%. The author presents four strategies to help businesses reduce their dependence on powerful platforms. Exploit the platform’s need to be comprehensive.American Airlines’ strong coverage of key routes made its presence on the travel website Kayak indispensable to Kayak’s value proposition. As a result, AA negotiated a better deal. Identify and discredit discrimination.Public complaints that eBay was giving search prominence to suppliers who advertised on the site forced a reversal of the policy. Create an alternative platform.When MovieTickets was on the verge of dominating phone and online ticketing, Regal Entertainment and two other large theater chains formed Fandango. Deal more directly.People ordering takeout through online platforms like Foodler and GrubHub have often already chosen their restaurant. Restaurants that deal directly can exit the platform.
In our increasingly digital world, businesses and consumers have become starkly more dependent on a number of powerful platforms. Of course, platforms aren’t new. For three decades, airlines have been relying on computerized reservation systems to reach travel agents and key customers. But platform dependence is now ubiquitous. Almost every retailer looks to Google to refer customers, and it’s rare to find a manufacturer whose products are not sold on Amazon. A version of this article appeared in the June 2014 issue of Harvard Business Review.
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